This article was first published on Nov. 8. It has been updated to reflect Donald Trumps’s election victory.

During this seemingly eternal election campaign, with its twists, turns and October surprises, the one constant was that Hillary Clinton led Donald Trump in most national polls.

Early on election day, Mickey Levy, chief economist for Berenberg, said that a Trump victory would likely mean “an immediate negative market reaction” and the dollar would “likely depreciate against major currencies.” Levy said that while he would expect the market to recover, the timing would depend on Trump’s statements and “signs of reasonableness” from the new administration to comfort the market.

Action in overseas markets and U.S. stock futures pointed to significant declines Wednesday morning. But panicking has been a fine recipe for underperformance recently. There have been two 10% declines in the S&P 500
SPX, -1.54%
over the past 18 months, followed by quick bouncebacks. If you are pouring money on a regular basis into index funds through an employer-sponsored retirement plan, major dips can be wonderful, since some of your contributions are invested at lower prices. But all too often, individual investors buy high and sell low.

FactSet

The S&P 500 has seen two corrections (declines of 10% or more) over the past 18 months.

Browne also suggested investors consider emerging-market ETFs, which are in the midst of a comeback. In a potential inflationary environment, he believes emerging-market stocks would be strong, but “overall, if people think commodities will do well, emerging markets will well, regardless of who wins.”

Browne also believes there likely will be a return to the “flight to yield” that pushed up the utilities, telecommunications, consumer discretionary and real-estate sectors earlier this year. Many dividend stocks have pulled back during the election season. No matter who wins the presidency, the low interest-rate environment will remain, and he sees investors struggling to make more than 2% on bonds. The 10-year U.S. Treasury note
TMUBMUSD10Y, +0.59%
now yields about 1.8%.

Those looking for income and willing to take on stock-market risk may want to consider the Global X SuperDividend U.S. ETF
DIV, -0.44%
with an SEC 30-day yield of 6.91%. It has the highest FundX ranking among dividend ETFs, he said. Another option for income as well as growth is the American Century Equity Income Fund
TWEIX, -1.17%
a large-cap value fund with a 30-day yield of 1.72%.

Health-care stocks, the weakest sector this year, may continue to decline, because legislation to clamp down on drug prices or expand Obamacare seems less likely under a Trump administration. He might even succeed in repealing the Affordable Care Act.

On the other hand, Trump’s own plan to increase drug imports could pressure drug prices. So politics are likely to keep stock prices volatile. Read 3 potential health-care stock winners amid the rubble for more on what’s at stake for health care and the stocks in that sector.

Philip
van Doorn

Philip van Doorn covers various investment and industry topics. He has previously worked as a senior analyst at TheStreet.com. He also has experience in community banking and as a credit analyst at the Federal Home Loan Bank of New York.

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Philip
van Doorn

Philip van Doorn covers various investment and industry topics. He has previously worked as a senior analyst at TheStreet.com. He also has experience in community banking and as a credit analyst at the Federal Home Loan Bank of New York.

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